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Notes on a Book - the Long Tail

The Long Tail: Why the Future of Business Is Selling Less of More is a book born out of a magazine article by Wired editor Chris Anderson. In a lot of ways, the article is sufficient. The Long Tail is a worthwhile topic, indeed, but at times I felt I was reading filler rather than information.

Once again, I borrowed this book from the library, and that’s what I suggest you do, too. The Long Tail is a relatively quick read, but just take some notes and drop the volume in the book return. Buying is unnecessary.

Brain dump:

This is the long tail (sales versus sales rank).

Themes for the long tail age:

  1. There are far more niche goods than hits.
  2. The costs of reaching those niches is now falling dramatically.
  3. Filters can drive demand down the tail.
  4. Massive variety coupled with filters flattens the demand curve.
  5. There are so many niche products that collectively they can comprise a market rivaling the hits.
  6. The natural state of demand is as diverse as the population itself.

Bringing niches within reach yields previously unknown demand.

In the past, limited supply created a hit-based marketplace. Massive, unprecedented choice is killing the hit-based economy. Even broadcast has upper bounds (channels, hours in the day, etc). Existing media is still oriented around blockbusters.

Products online can be listed in multiple categories, which is a giant advantage over retail and its categorized shelves. Retail is also cursed by needing local audiences.

The long tail started taking shape when Sears catalogs first shipped. Supermarkets and toll free business numbers also lead to where we are today. Examples: Long tail of advertising - Google. Long tail of computer programming - Linux, Firefox. Long tail of labor - offshoring. Long tail of general goods - eBay. Long tail of movie rentals - Netflix. Long tail of music - Rhapsody, iTunes.

Long tails emerge through democratization of production tools (lengthens tail), cutting costs through democratization of distribution (fattens tail), and connecting supply and demand (drives business from hits to niches).

Example: Wikipedia operates on likelihood rather than certainty. Messiness at the microscale is the price for efficiency at the macroscale. Wikipedia probably has a million more entries than any other encyclopedia, but Wikipedia only has a statistical level of quality: some great, some mediocre, and some horrible.

Example: Any one individual blogger may not be accurate, but the “collective intelligence” fact checks and corrects faster than any paper publication ever could.

Self-publishing is now an option because of cheap tools. Sometimes the benefit of self-publishing is not the money, but rather the built-in advertisement.

Example: Lonely Island (think Andy Samberg/“Chronic of Narnia” on SNL) formed when a group of folks couldn’t crack (or perhaps didn’t want to crack) Hollywood. Their web presence led them to reach their goals.

An aggregator is a company or service that offers a huge amount of goods in an easy-to-find interface.

Some companies are entering the tail in a hybrid fashion (selling both physical and digital goods).

Example: Amazon started as a physical sales entity. It has since added print-on-demand for some books, moving the storage to digital, even for physical goods. Amazon’s real genius is the marketplace: letting other, mostly small, companies handle the storage and distribution of physical goods allows Amazon to offer unprecedented selection.

To get all the way down the tail, inventory (shelf space) needs to reach zero, making the cost of adding more niche inventory approach zero.

The power of collective intelligence allows companies to draw conclusions based on users’ activities.

Filters are key to sort through the long tail. Recommendations, tags, search, so on finds the quality in the very noisy tail. Things like top ten lists become more useful on a micro level. A top ten list of disparate genres does not really help someone discover new content of interest.

The 80/20 rule (20% of products account for 80% of revenue) breaks down when tapping the long tail. Since vendors on the long tail can provide orders of magnitude more product, the math changes and niche products become profitable.

Within niches there are also long tails. In a category, certain niche products sell more than others. This means the long tail is fractal.

The long tail does not necessarily increase demand, but it does shift it toward the niches. If we enjoy what we purchase, there is opportunity for demand to increase as well.

Time tends to impact popularity. Google is changing this “rule” because it is mostly not aware of time, but rather relevancy.

Of the 30,000 new music albums released each year, Wal-Mart carries 750.

Some argue that too much choice is oppressive. The key to making use of choice is to have excellent filters (recommendations, search, top ten lists, etc). I actually think these two concepts can live together. In some cases too much choice is detrimental to experience, in other cases the choice can be managed elegantly.

Lots and lots of TV/video content is broadcast and lost pretty much forever in a bog of licensing issues and disinterest. There’s a ton of opportunity here.

Long tail rules:

  1. Move inventory way in or way out.
  2. Let customers do the work.
  3. One distribution method does not fit all.
  4. One product does not fit all.
  5. One price does not fit all.
  6. Share information.
  7. Think "and" not "or."
  8. Trust the market to do your job.
  9. Understand the power of free.

And finally a reward for everyone that made it this far. Did you know there is a machine that exists right now to print 3D objects? It’s called the T66 Benchtop, by Solidscape. Think liquid polymer changed to hard plastic.